It’s the uncertainty, stupid
I’m not an economic genius, I’m just a middle class guy who has a knack for saving and investing for myself with a few hundred thousand bucks in my 401k, a house that I bought for cash and remodeled for about half-again as much as the purchase price with two reasonably new cars in the driveway. The extent of my economics education was one semester of Econ 101 and 57 years of living mostly in this country.
The President called together some economics experts from academia and asked them how he could fix the economy. According to the Washington Post, they told him to forgive mortgage debt. Geitner, the tax cheat, responded; “How do we get this done through Congress?”
Yeah, that’s the problem – getting it through Congress. Not like it adds to the uncertainty that’s already already driving this economy into the ground. Who would take any US debt instrument seriously ever again if the government forgave mortgages?
The solution to the economic problem in this country, aside from drilling our oil and gas natural resources, is to add certainty to the economy. Employers are not hiring because there is too much guess work going forward in regards to impending tax hikes, this administration’s plan to penalize energy consumption, and their generally anti-business attitude.
The easiest and cheapest way to fix the economy is to make the current marginal tax rates permanent – permanently, trash plans to pass the “Cap and Trade Bill”, extend the Obamacare effective date, if you won’t end it and quit trashing clean coal. Stop talking about mortgage relief. All of that might give employers a little confidence in the future of the economy so they’ll start hiring again.
Then after you do all of that, put the Energy Department to work slicing it’s way through the red tape to get refineries and pipelines built, start drilling for our own energy resources and cut our umbilical cord to the Middle East’s oil. Let the Arabs wither on their vine and put Americans to work building the new infrastructure we’ll need to get our own energy to market with the money we’re not sending to OPEC.
I’m no economist, but all of that is glaringly apparent to one little guy sitting on a mountain top in West Virginia, so why don’t those morons in Washington see it from their catbird seats?
Category: Barack Obama/Joe Biden, Economy
You’re having far too much fun with this, Jonn.
You should know by now that, once someone goes into the White House (nowadays, at least), they go brain-dead if they weren’t that way already. If they were already brain-dead, they never see real sunlight again until they’re voted out of office.
Ever notice how the Big Cheese only returns to Chicago under the cover of darkness?
“…and cut our umbilical cord to the Middle East’s oil.”
What you said was spot on, thought I’d address one thing though. The majority of our oil comes from the Western Hemisphere, not from the Middle East:
http://www.npr.org/2012/04/11/150444802/where-does-america-get-oil-you-may-be-surprised
This makes sense on the account that piping the oil in from the source is more economical and convenient than shipping it in.
I have found that taking your logic pills in this day and age only causes ulcers….
There’s your problem… they may be sitting on their catbird seats, but their view is strictly that of their own colons…
I have never seen a seated catbird. Neither have I seen a stupider idea than mortgage forgiveness–whatever it is. What the hell business it is of the gov’t to involve itself with such things?
Mortgage forgiveness is telling people whose homes are worth less than the loan they took out that they cna refinance to what their homes are actually worth…which might possibly BE NOTHING, in which case those people would OWE NOTHING, which means they’d get a free house at our expense.
Hey! I just started a rumor with that last bit, didn’t I? Durn! Run with it!
It’s not that it’s not glaringly apparent. The problem is that it isn’t ideologically compatible with their world views.
Goody, I’m pulling for “mortgage debt forgiveness.” Doesn’t that mean that I get to not pay my legally incurred debts AND get a free cell phone?
Here is my humble opinion on why the economy is forever doomed. Under, and I hate to use this word, a ‘fair’ system of government and taxation, I would be taxed at a reasonable level, the Government would spend in a reasonable and not too wasteful way and and all would be good. I would get out every four years and vote for whoever would keep this situation stable.
The problem the Left have is that a critical part of their base will only turn out and vote if they believe they will be getting more. This is what we can see in Europe where the left have bankrupted their countries with ever increasing benefits.
As can be seen in California, where even the dumbest politician must see the future consequences, the desire to stay in power overcomes all else.
When the situation gets bad enough, the Right will get back in for a short while and attempt to correct things. By this point the actions needed will be so stringent and unpopular that it will be a one term shot and the left will pick up where they left off.
One thing I should have mentioned; Before I bought my house, I resisted popular culture and all of my workmates who told me I HAD to buy a house during a seller’s market and that the housing bubble was never going to burst, especially in the DC area. Funny, but I just waited until this thing called “a buyer’s market” came along, which happened to be accompanied by an $8000 tax break (which built my deck and remodeled the kitchen).
My simple investment advice has always been this; if you’re doing what everyone else is doing, you’re about to lose your ass.
I paid cash for my little house when I bought it.
I read an article in 2004 that discussed the housing boom in the 1920s and how it came to a screeching halt when the stock market crashed. I was living in a 1926-era apartment building and my landlord would not fix things that needed fixing.
So I bought my house and left my apartment and now I see foreclosures and sheriff’s sales every time I look at the classifieds in the newspaper.
If things follow the same pattern they followed in the 1930s, there will be another slide in the stock market before too long. Then the Big Cheese can say “everything is just fine” and go fishing.
Ex-PH2 Says: Mortgage forgiveness is telling people whose homes are worth less than the loan they took out that they cna refinance to what their homes are actually worth…which might possibly BE NOTHING, in which case those people would OWE NOTHING, which means they’d get a free house at our expense. ——- I lost my home to foreclosure January 2010. 2 years of unemployment led to that. I live in Michigan, which is a state that does not forgive foreclosure deficiency. I forget what it is called, but there are some States where the State does not come after the owner for the deficiency (the amount difference between what the former owner owed and the amount for which the house was eventually sold after foreclosure… ie. if $100,000 was still owed on the loan at time of foreclosure, and the house was sold later for $50,000, the deficiency would be $50,000). Well, I was told that States are no longer going after people in foreclosures for the deficiency (too much of a hassle for them, since so many have gone through it), but we will still get a Form 801(c) (or whatever number it is) which treats the forgiven deficiency amount as “income”. Thus, we have to pay taxes on that income, based on our income level. My deficiency is around $75,000. So I’ve been planning for that since I finally landed a job last year. I’ve been putting away $1000/month into savings, assuming I’ll have to pay 25% tax on $75k ($18,750). What pisses me off now is hearing about this “mortgage forgiveness” crap. I lose my house and am going to rightfully pay my taxes because of that situation, but now I’m going to have my taxes raised to pay for others to stay in their houses? That’s BS. People in this nation are not going to learn any lessons about saving and budgeting and such unless they are forced to go through the consequences of bad decisions. I learned my lesson (should not have bought the house in 2003 with a no-money down loan, just because I… Read more »
Jonn Lilyea Says: One thing I should have mentioned; Before I bought my house, I resisted popular culture and all of my workmates who told me I HAD to buy a house during a seller’s market … My simple investment advice has always been this; if you’re doing what everyone else is doing, you’re about to lose your ass. ———- This was the exact “bad suggestion from a friend” I was referring to above. Wish I had known you back in 2003, Jonn, or at least had a little more common sense to realize that one shouldn’t buy in a “seller’s market”. I got caught up in the idea of being a home-owner and how it would be an “investment”, etc etc etc. One of the dumbest decisions of my life. It’s set me back YEARS financially. Just 5 years ago, I was 31, a home-owner, successful designer of 8 years at Ford Motor Company and well-respected and liked by my peers and bosses and had around $45,000 in my 401(k). Fast-forward to now, and I’m about to turn 37, have a foreclosure on my credit report, went through my entire 401(k) from my old job to stay afloat during unemployment (stopped paying on my mortgage in order to keep all my other bills current), have no savings (except that which I am saving to pay my taxes on the forgiven deficiency debt) and my credit probably won’t recover fully for another year or so. Even then, I’ll not have anywhere near the money to put 20% down on a house until I’m near 40. Yeah, my sob story is not anywhere near as dire as those of so many millions of others’/families’. But compared to where I had planned/dreamed to be right now in my life? (Dreamed of being married by my middle 20s, family started by my 30s). The fact that none of that can happen anymore, since I won’t be worthy of being a husband or father until my life is stable again when I am near 40… when it will be far too late to get… Read more »
@13. Are you sure you will owe taxes on the forgiven deficiency? If your house was sold in the last 5 years and was your primary residence, you should be clear of those taxes. The controlling law expires Dec 31 2012.
2-17 Air Cav Says: @13. Are you sure you will owe taxes on the forgiven deficiency? If your house was sold in the last 5 years and was your primary residence, you should be clear of those taxes. The controlling law expires Dec 31 2012.
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I’m actually not sure of anything right now. The only reason I even know that my old house was sold is because I saved one of the pages about it online and noticed that it was sold earlier this year. Not sure to whom, but I know it was sold. And I think it was for $79,000 (what’s amazing is that the estimated mortgage payment on that house for the new owner is less than my $800 rent for my current crappy 2-bedroom apartment. I was paying $1200/mo for the mortgage).
But I have received nothing in the mail regarding the house since I moved out AUG 2011 except for a Form 801(a) (again not sure on the form number, but it’s a tax form that deals with foreclosures) sent to me during tax season last year. I think it is a precursor to a Form 801(c) which is the forgiven debt form which I will need to file to pay the taxes on it.
I spoke to a free lawyer last August as soon as I moved out to determine my next steps and he mentioned the forgiven deficiency and the taxes on that. But also stated that if I could find a competent tax attorney, they could probably find enough loopholes in the tax code to get what I owe cut in half. But I’m planning for worst case (saving enough per month to cover 25% of $75,000).
All I know is that at the Sheriff sale, the entire amount I owed was paid to Bank of America by Fannie Mae. So after the Sheriff sale, Fannie Mae (government) owned my old home. So it made sense to me that they would forgive the deficiency, since the government will still get my money through the IRS.
@13, who told you that 40 is too late to get married and start a family?
Ex-PH2 Says: @13, who told you that 40 is too late to get married and start a family?
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Eh, long story. My own assessment based on my experience and observations.
Someone should tell TSO that 40 is too late to get married and start a family. But, it’s probably too late tell him.
Michael: The way these things generally work is that a foreclosure or short sale results in the mortgage lender receiving less than was owed on the property. If the difference–the deficiency–is forgiven, then the lender will not come after the borrower for the deficiency BUT taxes must be paid on the difference UNLESS the transaction qualifies under the Mortgage Debt Relief Act of 2007 (which expires 31 Dec 2012). In such a case, a tax filing must be made but the deficiency will not be taxed as income. Unless you are absolutely certain where you stand with respect to the deficiency taxes, I would urge you to consult with one or two or even three attorneys. The reason? Consultations are free and if 2 of 3 or 3 of 3 say the same thing, you can bank on the free advice. I wish you the best of luck. As for that 40 business, you’re a young man. Deal with the present, screw the past, and go attack the future!
Yeah, maybe Mrs. TSO should give Michael some advice on finding the right woman.
I can only say, when the “bad” boys have gone away and you apply a little common sense, women mostly want a nice guy who is reliable and decent, and isn’t pretending to be something he is not.
Michael–I’m closer to 50 than you are to 40, and I’m starting a family (again.)
It’s never too late.
Welp, I must disagree with the “40 isn’t to old to start a family” crowd. I look at it as what about the kids? Michael in MI would be almost 60, or older, by the time his kids graduated from high school. Mid 60s by the time they graduated from college. How about being 50 and trying to teach your son to throw a baseball or football or how to play soccer? Because my kids were born when I was 22, 24 and twenty-six, I was able to teach them all all of these things. A friend of mine got married at 38 and has his daughter at 41, by the time she was in high school her classmates were asking her if he was her grandfather!?! What about the kids?
2-17 Air Cav Says: Unless you are absolutely certain where you stand with respect to the deficiency taxes, I would urge you to consult with one or two or even three attorneys. The reason? Consultations are free and if 2 of 3 or 3 of 3 say the same thing, you can bank on the free advice. I wish you the best of luck. ———- Thanks, Air Cav. I am definitely not absolutely certain where I stand. As I mentioned earlier, I talked to a few lawyers about this situation when I was going through the foreclosure last year — as well as to the realtors who were trying to short sale my home before the foreclosure — and what I learned then was that I probably would not have to pay the deficiency, but would have to file that forgiven debt as 2012 income on my next tax return and then pay taxes on it. But, I haven’t received any paperwork regarding the house since I moved out last year. No notice of the Sheriff sale when it happened, no notice of the sale in FEB 2012 when it happened, nothing to notify me of any deficiency I owe that would be considered income, etc. I’m just going by my assumptions right now, based on my research and talking with some attorneys. Interesting… I just looked up the Mortgage Forgiveness Debt Relief Act and Debt Cancellation and it sounds like under that act, I would not have to pay taxes on that forgiven debt. I’ll still have to file Form 982 to report the forgiven debt, but likely will not have it treated as income under the MFDR Act. I remember I looked this up last year as well. But I could have sworn I read somewhere that it wouldn’t apply to me for some reason. Just read a bit more and the form I was thinking of was Form 1099-C. I received a Form 1099-A previously. I think that was a precursor to the Form 1099-C. My old house was sold at the end of FEB 2012 and… Read more »
Yat Yas 1833 Says: Welp, I must disagree with the “40 isn’t to old to start a family” crowd. I look at it as what about the kids? Michael in MI would be almost 60, or older, by the time his kids graduated from high school. Mid 60s by the time they graduated from college.
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Yep, thought about that, and it’s only part of my reasoning for believing it’s too late. I’m not worried so much about being too old to be active with my kids/teens. I stay in decent shape and am very active with working out, rollerblading, softball and walleyball.
My main concern is the first part: finding a woman who’s single, never married and is young enough to still want — and able — to have children. Oh and conservative.
Anyway, sorry I even brought that up. I didn’t mean to distract from my main point, which is that people don’t learn lessons from their mistakes unless they have to face the consequences of their mistakes.
Yeah, Michael and YatYas, that’s a load of baloney and you know it.
ex-PH2, I really believe what I said. I’m 56 now and after spending the afternoon with my grandkids, like yesterday, I was tuckered out. When I was 50 my first grandbaby could make me tired chasing her around when she was two! I’m in pretty good shape, I still play indoor soccer and race bicycles for Team Cotman’s “Master” (that means old guys) team and like I said, they can still wear me out. Imagine having to do that every day?
Oh, you poor thing. I feel so sorry for you.
Wednesday, I managed to fix the broken kitchen drawer, put away all the laundry, change the bed, do more laundry, do the dishes and put them away, sweep the kitchen floor, rake up the leaves on the lawn and prune the rosebushes, clean the birdbath, refill the bird feeder, get to the grocery store for last minute stuff, carry in 40 pounds of cat litter, 15 pounds of dry cat food, two cartons of Fancy Feast,and 20 pounds of birdfeed, put the hoses and lawn mower away for winter, take out three bags of trash, and put the dishes away.
What were you complaining about?
ex-PH2, I understand and respect your point of view. Forgive me if I come across as insensitive but did you have children later in life or have grandkids now? I do many of the same things as you but I can pace those chores over a couple of days, with a kid or grandkid you gotta be on/with them constantly. With chores, at the end of the day, you can quit, with kids it’s a 24 hour a day thing. With grandkids it’s as long as you have them thing.
Heh. I have a question or two. When is a father too old to love his child? How many disabled Veterans are wonderful dads but are limited in the physical activities they can share with their children? How many young (i.e., under 40)fathers spend more time at work and with the boys then they do at home? Fatherhood is about self sacrifice and love. What are the age limits on those things?
#13. Been there, too. We didn’t even pay an elevated amount for our house. And don’t buy the hype- Too old for kids, fam. Etc. bull. Women want a partner to fight through life with not a savior to make it all better.
I don’t know where in mi you are, but I paid 10k for a house outside of Cleveland and we just had to replace the water lines. Think outside the box.
Unsolicited advice: You’ve lost a hell of a lot- you’re perception of how bad things are not necessarily as bad as they are in reality.
That said: You nailed it, Jonn
As good***** I meant not as good. Jeez. So sorry!!!
Air cav. Well said
Wait- Previously married women aren’t all bad! I was a catch!!! I got married too young to a man who was too mean. I wasn’t delusional about what married life would be like. :(. Don’t eliminate a whole group of wonderful people.
Oh. And men at church barely acknowledged me- being tainted and all. I had to find a guy and convert him! :).
What AirCav and Boo said.
It’s only when you give up, that you lose out.
And telling me that you don’t understand why a 180-lb middle-aged adult can’t keep up with a 30-lb two year old is telling me you don’t understand why a 50-ton diesel with a mile-long freight load can’t keep up with a Ferrari on the highway. It’s physics, guys, simple physics. Mass and gravity create drag. The larger the object, the higher the mass and the stronger the pull of gravity.
2-17 Air Cav Says: Fatherhood is about self sacrifice and love. What are the age limits on those things?
Oy, so sorry I opened this can of worms…
For the record, I 100% agree with you, Air Cav. My reasoning in stating “40 is too old to start a family” is not, because it is my opinion, but rather, because I believe most women would judge me on my age and feel that I am too old. Thus my chances of finding someone who wants to start a family with a 40-year old man are limited.
I know there are exceptions to this ‘rule’. Such as TSO and NHSparky. Those men are the lucky ones, the exceptions to the rule, in my opinion.
BooRadley Says: I don’t know where in mi you are, but I paid 10k for a house outside of Cleveland and we just had to replace the water lines. Think outside the box.
SE Michigan, suburbs of Detroit. Work in Auburn Hills. I actually almost got lucky a couple months ago as a friend at work had a house to rent. But problems with evicting his tenants prevented me from moving in. Their lease is up in January, so I’m hoping to get another opportunity to move in after my lease is up in April. We’ll see.
BooRadley Says: Unsolicited advice: You’ve lost a hell of a lot – you’re perception of how bad things are not necessarily as bad as they are in reality.
100% agreed. Taken in perspective, I have a really good life. I have family back home (Chicago) who cares about me, good friends, work with great people and for good supervisors, work in a job that I really enjoy and challenges me every day, have a roof over my head and make enough money at my job that I don’t have to worry about money for the simple lifestyle that I lead. If I keep that in mind, instead of comparing where I am in life to where I wanted to be in life, I’m good.
I probably need to keep IMAO in mind when faced with plans in life that don’t pan out how I had wanted… 🙂
@36. Now you’re talking. I hate to sound like a pollyanna but I am fond of saying that the cemeteries are full of people who would love to have my problems.
“I know there are exceptions to this ‘rule’. Such as TSO and NHSparky. Those men are the lucky ones, the exceptions to the rule, in my opinion.”
For Pete’s sake, there ARE NO RULES about this. AirCav is right. Boo is right. Jonn is right. If you made up your mind that you’re out of the picture, you put that “rule” that you made up on yourself.
There are NO rules about any of it.
Gonna have to say that none of us can (as in should) tell Michael what is best for him. Yeah, we can share experiences or best advice, but utimately, Michael gets to make that decision for himself based upon whatever criteria he wishes to use, even if it is irrational.
That said, please, Michael, don’t limit the possibilities for yourself. There just might be a great young widow out there with a couple of smallish children who would be your perfect mate. For instance.
And there are worse things than having no children!
FFS I’m sorry I brought the damn subject up.
My point was that I learned my lesson from my mistake, because I had to face the consequences of my mistake. And it frustrates me that we’re developing a society that never learns from their mistakes, and keeps repeating them over and over again, because liberal government policies keep giving out “bailouts”.
And your story epitomizes this topic perfectly, Michael. Most of us no matter our age face more uncertainty than we had expected and planned for.